The U.S. crypto market is booming: $7.5 billion has flowed in, is the bull market coming?

Written by: SuperEx

Compiled by: VernacularBlockchain

The crypto market has recently become a battleground for opposing views. Some analysts insist that the bull market has arrived, while others believe that we are just hovering at the end of the previous cycle. Neither side has been able to fully convince the other, but data may provide a clear perspective that emotions cannot. Let's assess the current market temperature through the lens of capital flows.

According to data from SuperEx Research Institute, U.S. crypto investment products saw net inflows of up to $785 million last week, marking the fifth consecutive week of positive inflows and bringing the cumulative inflows so far in 2025 to over $7.5 billion for the first time.

This is in stark contrast to the massive capital outflows in February and March, when nearly $7 billion flowed out in just a few weeks. As the inflows continue, the question is growing: Are we witnessing the early days of a true bull run?

Expectations for policy easing have increased, and reduced policy uncertainty has stimulated risk appetite

Since the beginning of May, the United States and several major economies have released a series of "loose" signals on trade and monetary policies, restoring investors' confidence in the overall policy environment.

On the one hand, the White House's slowing pace of negotiations with major economic partners has eased concerns about potential trade conflicts. On the other hand, the latest statements from several Federal Reserve officials indicate that interest rates may have peaked, and market expectations for rate cuts later this year are gradually recovering. Against the backdrop of this dual easing, the volatility of traditional financial markets has declined, prompting capital to re-regard crypto assets as a viable allocation target.

It is worth noting that the improvement in policy predictability has played a key role. The increase in liquidity of Bitcoin and Ethereum ETFs, as well as the softening of regulatory attitudes in some regions, have boosted the confidence of institutional investors to re-enter the market, becoming the main driving force behind the current wave of capital inflows.

Capital is concentrated on core assets, and the Ethereum ecosystem is favored

This round of capital inflows shows obvious structural preferences: mainstream assets dominate, and Ethereum attracts the most attention besides Bitcoin.

Data shows that Ethereum had a net inflow of $205 million last week, the largest single-week increase so far in 2025. From a technical perspective, the recent upgrade of the Ethereum network has significantly improved its performance and scalability, further enhancing institutions' confidence in its future role in DeFi, AI-integrated blockchain services, and Rollup infrastructure.

More importantly, Ethereum is increasingly seen as a "super-sovereign asset". It is not only a payment medium and collateral, but also serves as the underlying "fuel" of the Layer 2 ecosystem. Its value proposition is shifting from a single token to critical infrastructure.

Investors now view Ethereum as the "digital treasury bond" of the Web3 world - not providing returns, but providing stability and liquidity similar to gateway-level assets. This shift in perception is the core reason why capital is increasingly concentrated in Ethereum.

Is the bull market really back?

The key question is: Is this a true bull run, or just a relief rally?

The answer lies not in social media sentiment but in the underlying mechanisms of capital allocation, user behavior, macroeconomic conditions, and technological momentum.

Institutional inflows show confidence returning

The strongest evidence is the scale of institutional participation. The $785 million in inflows in a week were not driven by retail investors. This liquidity came from hedge funds, family offices, and asset managers reallocating their portfolios.

Furthermore, the United States was clearly in the lead, contributing $681 million of the total inflows for the week. Germany followed closely with $86.3 million, while Hong Kong recorded inflows of $24.4 million. This shows that institutional confidence is not a local phenomenon, but a global one, albeit centered on the United States.

When institutional capital begins to flow into high-risk, high-return crypto assets during periods of relative geopolitical tension, this is often a forward-looking signal. These participants are not chasing FOMO, but are positioning themselves for expected monetary policy shifts or technology adoption curves.

Macro tailwinds are emerging

From a macro perspective, several factors are aligning:

Interest rates have peaked: While the Fed has not yet turned to rate cuts, the market generally expects that the tightening cycle is over. A stable or accommodative interest rate environment is generally good for long-term assets, including cryptocurrencies.

Geopolitical risk hedging: The temporary truce in tariffs between the US and China and uncertainties in traditional markets (such as pressure on the stock market and a weaker US dollar index) are driving investors to turn to alternative assets.

On-chain and technical indicators heat up

In addition to capital flows, on-chain activity also shows encouraging signs. Daily active addresses, total locked value (TVL), and stablecoin supply for Ethereum and its Layer 2 (such as Arbitrum and Optimism) are rising. Bitcoin's hash rate remains at a historical high, indicating miner confidence and long-term sustainability.

At the same time, leading indicators such as the PI cycle top indicator and the MVRV ratio have not yet sent overheating signals, which means that the current rebound has not yet reached a frenzy.

Still need to be cautious

However, the market is still in a transition phase rather than a full-blown mania:

• Retail participation is lagging: Google searches for “Bitcoin” and “Ethereum” remain flat, suggesting retail FOMO has yet to kick in, a sign of a late-stage bull market.

• Altcoin cycle downturn: Although Ethereum has performed strongly, most altcoins are still far below their 2021 highs. Before funds are widely rotated to mid- and low-market-cap tokens, the market may still be dominated by mainstream assets.

Structural shifts support long-term bull case

Beyond the price charts and weekly inflows, fundamental improvements are happening in the industry. Ethereum’s Pectra upgrade, widespread adoption of ZK-rollups, and continued development of Bitcoin’s Layer 2 solutions like Lightning and Runes are laying the foundation for long-term scalability.

At the same time, the tokenization of real-world assets (RWA) is gaining favor among institutions. Companies such as BlackRock, Franklin Templeton, and JPMorgan Chase are actively exploring blockchain-based traditional securities settlement. The integration of traditional finance and crypto infrastructure shows that this is not just a seasonal rebound, but a multi-year bull market narrative.

In short, the current wave of inflows is not just speculative but is backed by technical and institutional tailwinds.

Summarize

So, is the bull market really back?

All signs point to a cautious “yes.” We are seeing continued institutional inflows, macro headwinds turning into tailwinds, and renewed energy from key technical upgrades to base networks like Ethereum and Bitcoin. While the market has not yet entered a frenzy—which is actually a good thing—it is clearly regaining strength.

For investors still on the sidelines, the next few weeks could be critical. If inflows continue and the altcoin market follows suit, the 2025 bull run may no longer be a theory but a reality.

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